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TechnipFMC's (FTI) Q3 Earnings Preview: Things to Consider
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TechnipFMC plc (FTI - Free Report) is set to release third-quarter 2024 results on Oct. 24. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 40 cents per share on revenues of $2.3 billion.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Let’s delve into the factors that might have influenced the oilfield services provider’s performance in the September quarter. But it’s worth taking a look at FTI’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, this London-based manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry beat the consensus mark on better-than-expected performance in the Subsea segment. TechnipFMC had reported adjusted earnings per share of 43 cents in the second quarter, beating the Zacks Consensus Estimate of 31 cents. Revenues of $2.3 billion also breezed past the Zacks Consensus Estimate by 3.7%.
FTI beat the Zacks Consensus Estimate in each of the last four quarters, which resulted in an average earnings surprise of 24.5%. This is depicted in the graph below:
The Zacks Consensus Estimate for the third-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 90.5% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 13.9% increase from the year-ago period.
Factors to Consider
TechnipFMC’s total backlog reached a historic high of $13.9 billion in the second quarter of 2024, a 4.7% increase from the year-ago period. In particular, the company’s Subsea 2.0 platform — a new, technologically sophisticated suite of products that improves project economics by cutting down on the dimensions of the equipment installed underwater — has been enjoying fast-track adoption. The next-generation, environment-friendly all-electric system has opened up further opportunities. Consequently, our expectation for FTI’s third-quarter backlog is pegged at $14.4 billion, up 9% from the year-ago quarter’s level of $13.2 billion. This growing backlog ensures strong revenue visibility and supports margin improvements.
However, the decrease in revenue and adjusted EBITDA margin in the Surface Technologies segment during the second quarter raises red flags. The 10.5% year-over-year decrease in revenues due to the sale of Measurement Solutions and lower activity in North America, coupled with a 1.9% decrease in adjusted EBITDA, suggests potential challenges in this segment's profitability and revenue-generation capabilities. Investors should note that our model projection for FTI’s third-quarter Surface Technologies’ revenues and adjusted EBITDA are pegged at $313.2 million and $45.5 million, respectively, down from the year-ago quarter’s levels of $348.6 million and $49.9 million.
What Does Our Model Say?
The proven Zacks model does not conclusively show that TechnipFMC is likely to beat estimates in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -5.15%.
Zacks Rank: FTI currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
While an earnings beat looks uncertain for TechnipFMC, here are some firms from the energy space that you may want to consider on the basis of our model:
Cheniere Energy (LNG - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct. 31.
Cheniere Energy has a trailing four-quarter earnings surprise of 55.9%, on average. Valued at around $41.3 billion, LNG has gained 3.9% in a year.
Oceaneering International (OII - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #3. The firm is scheduled to release earnings on Oct. 23.
The Zacks Consensus Estimate for 2024 earnings of Oceaneering International indicates 73.8% year-over-year growth. Valued at around $2.5 billion, OII has lost 2.4% in a year.
Core Laboratories (CLB - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #3. The firm is scheduled to release earnings on Oct. 23.
Core Laboratories has a trailing four-quarter earnings surprise of 3.5%, on average. Valued at around $881.5 million, CLB has lost 22.8% in a year.
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TechnipFMC's (FTI) Q3 Earnings Preview: Things to Consider
TechnipFMC plc (FTI - Free Report) is set to release third-quarter 2024 results on Oct. 24. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 40 cents per share on revenues of $2.3 billion.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Let’s delve into the factors that might have influenced the oilfield services provider’s performance in the September quarter. But it’s worth taking a look at FTI’s previous-quarter performance first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, this London-based manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry beat the consensus mark on better-than-expected performance in the Subsea segment. TechnipFMC had reported adjusted earnings per share of 43 cents in the second quarter, beating the Zacks Consensus Estimate of 31 cents. Revenues of $2.3 billion also breezed past the Zacks Consensus Estimate by 3.7%.
FTI beat the Zacks Consensus Estimate in each of the last four quarters, which resulted in an average earnings surprise of 24.5%. This is depicted in the graph below:
TechnipFMC plc Price and EPS Surprise
TechnipFMC plc price-eps-surprise | TechnipFMC plc Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 90.5% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 13.9% increase from the year-ago period.
Factors to Consider
TechnipFMC’s total backlog reached a historic high of $13.9 billion in the second quarter of 2024, a 4.7% increase from the year-ago period. In particular, the company’s Subsea 2.0 platform — a new, technologically sophisticated suite of products that improves project economics by cutting down on the dimensions of the equipment installed underwater — has been enjoying fast-track adoption. The next-generation, environment-friendly all-electric system has opened up further opportunities. Consequently, our expectation for FTI’s third-quarter backlog is pegged at $14.4 billion, up 9% from the year-ago quarter’s level of $13.2 billion. This growing backlog ensures strong revenue visibility and supports margin improvements.
However, the decrease in revenue and adjusted EBITDA margin in the Surface Technologies segment during the second quarter raises red flags. The 10.5% year-over-year decrease in revenues due to the sale of Measurement Solutions and lower activity in North America, coupled with a 1.9% decrease in adjusted EBITDA, suggests potential challenges in this segment's profitability and revenue-generation capabilities. Investors should note that our model projection for FTI’s third-quarter Surface Technologies’ revenues and adjusted EBITDA are pegged at $313.2 million and $45.5 million, respectively, down from the year-ago quarter’s levels of $348.6 million and $49.9 million.
What Does Our Model Say?
The proven Zacks model does not conclusively show that TechnipFMC is likely to beat estimates in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -5.15%.
Zacks Rank: FTI currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
While an earnings beat looks uncertain for TechnipFMC, here are some firms from the energy space that you may want to consider on the basis of our model:
Cheniere Energy (LNG - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct. 31.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Cheniere Energy has a trailing four-quarter earnings surprise of 55.9%, on average. Valued at around $41.3 billion, LNG has gained 3.9% in a year.
Oceaneering International (OII - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #3. The firm is scheduled to release earnings on Oct. 23.
The Zacks Consensus Estimate for 2024 earnings of Oceaneering International indicates 73.8% year-over-year growth. Valued at around $2.5 billion, OII has lost 2.4% in a year.
Core Laboratories (CLB - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #3. The firm is scheduled to release earnings on Oct. 23.
Core Laboratories has a trailing four-quarter earnings surprise of 3.5%, on average. Valued at around $881.5 million, CLB has lost 22.8% in a year.